A recent report from the Reserve Bank of India said that the credit pick – up are coming up in the busy season for the banks. As per the data released by the RBI, scheduled commercial banks have disbursed loans to a total amount of Rs. 55, 443 crore.
According to bankers, due to high interest rates the capital expenditure proposals for the expansion operations and building new projects are not coming up but still the loans for working capital and retail loans are increasing to an extent.
Bankers depend more on the busy season which starts from October 1 when there is a surge in the economic activity set off by the farmers who started spending their income they earned out of harvesting the kharif (autumn) crop and also spending on account of festival season.
According to Mr. N.S.Venkatesh, Chief General Manager of IDBI Bank there are no new proposals for loans from companies for fresh investment plans. So far in this financial year the loans raised are only the old sanctions which were converted into disbursements.
There have been a decrease in the issue of loans by banks due to the increasing interest rates and overall deceleration in the demand for goods and services. At present the minimum lending rate of banks is around 10.75 per cent against 8 per cent in July 2010.